Cyber Business Interruption

By Drew M. Smith

The level of business disruptions caused by cyber breaches is increasing with no signs of abating. A simple cyber breach could disrupt an entire company or organization and create significant financial losses. Many insurance policies do not offer protection for business interruption as a result of a cyber breach with a specific cyber policy including business interruption.

A breach can occur from any point in a system. Most frequently, breaches occur when someone opens an infected e-mail or link. This one click can cause massive damage to both the operations and the reputation of the victim.

Depending on the size of the company, it can have global consequences. One of the largest shipping companies in the world is A.P. Moller Maersk. One in seven container ships flies under the company banner and over a quarter of all Asia-Europe shipping uses their ships. When the Petya virus, the same one responsible for the Wannacry outbreak, struck their systems, it ground the company to a halt. Because of the sheer size of their operation, they had relied on the computers to move their global network more efficiently. Without the computers, ships couldn’t get into port because they couldn’t clear customs, forcing long lines outside of port as paperwork was hand delivered to each captain. This breakdown caused a cascading effect all the way down their line. Without orders or paperwork, the containers in the yards could not be shipped to correct destination, spoiling anything that was in boxes and clogging up the ports. This single virus almost brought the entire shipping industry to a standstill.1

Business interruption and dependent coverage in a cyber policy can help offset the costs associated with common losses caused by a cyber-attack. To mitigate the risk, there are several steps you should take. Update your computer to the latest patches available; many of these large scale breaches were because hackers struck legacy systems, systems that are outdated when it comes to security patches to allow for smoother operations. Have a plan in place for when operations are disrupted by a computer shutdown with your managing team. A cyber liability policy with a specific endorsement for data protection, asset protection, business interruption and dependent business interruption.

For more information on this topic, please contact Axis Insurance Services, LLC at or 201-847-9175.


Risk Management, Insurance Articles, Privacy/Network Security, Professional Liability

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